Centene (CNC): Is the Healthcare Giant Fairly Valued After Recent Share Price Recovery?

Centene (CNC) shares have seen modest movement recently, with the stock up 4% over the past month. Investors may be considering how ongoing developments in healthcare and the company’s improving annual revenue growth factor into current share prices.

See our latest analysis for Centene.

After a tough stretch earlier this year, Centene's recent momentum is hard to ignore, with a 16.4% 1-month share price return and a sharp rebound of 37.5% over the past 90 days. Still, the 1-year total shareholder return stands at -33.9%, which puts recent gains into perspective as the company works to restore long-term confidence and capitalize on sector tailwinds.

If you’re tracking shifts in the healthcare sector, it’s worth taking a look at similar names. Explore See the full list for free.

With Centene’s shares bouncing back but still trailing their longer-term highs, investors face a familiar question: is this the moment to buy into an undervalued healthcare giant, or is the market already factoring in any future growth?

Most Popular Narrative: Fairly Valued

Centene’s most widely followed narrative pegs its fair value remarkably close to the latest closing price, suggesting consensus that shares are now fairly priced after the recent rally. The narrative’s approach blends expected margin trends and sector forecasts, drawing from both recent business rebounds and persistent headwinds in government healthcare programs.

Improved Medicare Advantage outlook, along with commercial segment growth, supports positive revenue and earnings prospects through operational efficiencies and increased membership. Policy reform challenges, high medical expenses, and specialty drug costs pose risks to margins and revenue growth if not effectively managed.

Read the complete narrative.

Curious about what powers Centene’s just-right valuation? The narrative’s math balances tight revenue growth and shifting profit margins, but the full story uncovers surprising projections about government contracts and market share. Want to see which key assumptions give analysts confidence that the company is trading at its true value? Read on for the details driving this fair value call.

Result: Fair Value of $39.41 (ABOUT RIGHT)

Have a read of the narrative in full and understand what's behind the forecasts.

However, looming healthcare policy reforms and elevated medical costs could quickly undermine analysts' fair value view if these issues are not managed effectively by Centene.

Find out about the key risks to this Centene narrative.

Another View: Deeper Discount or Market Trap?

While the first valuation method suggests Centene is fairly priced, another look based on the price-to-sales ratio tells a different story. Centene trades at just 0.1x sales, which is far lower than its US Healthcare peers at 1.4x and well below the fair ratio of 0.8x the market could eventually target. That kind of discount can signal a potential opportunity, but it can also warn of hidden risks. Does this wide gap mean the market is missing something, or bracing for more trouble?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Centene Narrative

If you want to dig into the numbers yourself or test a different thesis, you can quickly shape your own story about Centene in just a few minutes. Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Centene.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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